Web Design, Develompent and Consulting

Financing Startups Matrix: Capital vs Scalability

Financing Startups Matrix: Capital vs Scalability

Analyzing Startup financing – matrix for Business Scalability vs. Capital Required

A handy tool to define when and where you need a specific financing. It may quite well turn out that your startup business does not require Venture Capital and is a ‘Lifestyle business’ instead with high level of ‘ownership’.

 

Venture Capital
  • you have a ‘big idea’ worth $50M
  • the idea requires millions of dollars to get the business to a positive  cash flow
  • you need venture capital.
 Not Viable
  • your business requires significant capital,
  • and your business does not scale much
  • you may not be able to find a viable funding source
  • try to find an investor who will believe into your company ‘bright future’
  • or start a new company
Bootstrap
  • you drive a small business and it generates some revenue
  • your business requirs little capital to achieve breakeven – you have a lifestyle business
Depends On Barriers
  • your company is scalable and requires little capital to grow
  • Competition and other risks may suggest you to bootstrap the company in order to maximize your ownership of the company
  • If your barriers are limited and additional capital can help you capture market share more quickly – you might consider venture capital

 

Read more: Markpeterdavis

Hand-outs

PDF: Financing Startups Matrix: Capital vs Scalability (pdf) (144 downloads)

PPT: Financing Startups Matrix: Capital vs Scalability (ppt) (1694 downloads)

PNG: Financing Startups Matrix: Capital vs Scalability (png) (129 downloads)